The International Monetary Fund (IMF) has called on Kenya to create a clear regulatory framework for its cryptocurrency market, amid growing concerns about consumer protection, anti-money laundering, and terrorism financing.
IMF's Crypto Regulation Recommendations
In a technical assistance report released on January 8, the IMF highlighted that Kenya's current regulations, based on traditional financial markets, are insufficient for the crypto world. These outdated rules have allowed the rise of crypto-related scams and crimes.
Key Recommendations from the IMF
The IMF laid out short, medium, and long-term steps for Kenya to improve its crypto regulations. In the short term, Kenya should analyze the crypto market and collaborate with other regulatory bodies, clarifying which crypto activities will be regulated.
Strengthening Cross-Border Cooperation
The IMF also advised Kenyan authorities to define crypto assets clearly in financial laws to avoid confusion between terms like 'digital currency' and 'virtual asset.' International collaboration is crucial to manage risks from foreign crypto exchanges operating in Kenya.
The IMF believes that implementing an updated regulatory framework will enhance consumer protection and foster innovation in Kenya's crypto sector, helping to avert financial crimes and maintain stability.
